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The Domino Effect: Price Changes and Their Resounding Impact

For as long as modern businesses have operated, price changes have lived alongside them, as they are an inevitable part of a company’s lifecycle. When a company decides to undergo a price change, there are many different stakeholders and factors to keep in mind. At a high level, management should pay close attention to the internal and external stakeholders involved in the process of a price change. In this blog post, we will discuss some of the typical reactions by these stakeholders, how to handle them, and why they occur.

When a company alters its prices, the impact is deeply felt within its internal teams. Particularly, their sales and customer service team.

The Effect on the Sales Team

In terms of the sales team, they are the ones usually taking the lead during these big shifts, so they are the first affected. Through ripple effects, even their compensation and work strategies may be impacted. If the prices are increased and the perceived value of the product/service remains enticing to the customer, it could lead to higher sales commissions due to higher-value transactions. However, if the price hike is seen as unjustified by the customer, the sales team may have to face very difficult and uncomfortable conversations with customers when securing deals. This increased difficulty to closing sales may negatively affect their compensation, and in turn, also affect their overall morale.

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Preparing the Sales Team

To combat potential negative financial and emotional effects of price changes on the sales team, the team needs to re-evaluate their sell stories to be more in-tune with the new price changes. If possible, the team needs to double-down on the value they are providing to justify the price increase. If the perceived value of the offering is actually

increasing, then their jobs become easier. If there is no improvement in perceived value, then the transition may require additional training and resources from management. Perhaps management can provide them with a playbook on customer pushbacks in order to best equip and prepare them to proactively handle price changes reactions prior to the change happening.

The Customer Service Team

Now that we know how to deal with the sales team during a price change, we can focus on the other key internal stakeholder: the customer service team. The main impact of pricing changes to the customer service team is their intensified workload. This is because customers typically approach the customer service team when searching for explanations about price changes. When a price hike occurs, the customer service team should prepare themselves for an influx of customer complaints or negative feedback coming their way. This could overwhelm the team and impact their work environment, which subsequently affects their overall morale. This is why it is crucial for management to prepare this team prior to the price change. The best way to approach this is by ensuring the education of the customer service team on the reasoning behind the pricing changes and how the change affects any internal backend systems. Once they are educated on the changes, they should be trained to convey them to the customer in an empathetic and effective way, perhaps through a playbook management provides them.

Customer Loyalty

After handling the internal parties involved in price changes, we can move on to the central external group involved in the changes: the customers. A shift in pricing inherently calls customers to re-assess the value of the offering they are receiving. If the price increase is minimal, or the perceived value of the offering is increased alongside the price hike, then brand loyalty may be enoughto keep the customers around. Brand loyalty is a useful defense against negative price change reactions, but it has its limits. Loyal customers may initially convey their understanding towards the price altercations, but after continued increases, or a substantial increase, even these loyal customers may start reconsidering their options.

Customer Variations

Aside from testing their loyalty, the direct financial implications price changes have on customers varies by customer. Customers on tighter budgets can find themselves disproportionately affected by price increases. They may be forced to halt the use of the offering, or at least reduce their consumption of the offering, while more financially free customers may come out unscathed. Whenever possible, if customer retention is the goal, all customer types should be kept in mind when implementing a price change to preserve the broadest group of them. If it's not feasible to cater to the needs of budget-conscious customers, then the persuasive/communication strategies and techniques that management has trained the sales and customer service teams with become crucial in convincing these customers to remain loyal.

Customer Reactions

Now having dealt with their reactions, we can discuss the customer’s main expectations when pricing changes occur: clear and honest communication. They seek to understand the reasons why the price hikes occurred in the first place, and what they can look forward to in terms of a perceived value increase. This is why internal training of your sales and customer service team with a response playbook is so crucial, so that customers can avoid any dissatisfaction on the communication side of things. Structured responses on the internal side of things can really help foster customer understanding.


In conclusion, the process of navigating through price changes calls for a deep understanding of all the stakeholders involved. It begins with recognizing the uncertainties and pushbacks your internal teams will be experiencing and providing them with the necessary strategies and tools to anticipate these pushbacks. The more confidence you instill in your internal teams through preparation and training, the more clarity they will externally convey to your customers. From an external standpoint, management must ensure an understanding of their customer’s sensitivities and values, and tailor their internal playbooks to capture those values. Generally, for customers, transparent communication ranks above all, as price changes aren’t merely a financial decision, they are a test of the company’s relationships with its employees and customers. Successfully handling this test can foster an even stronger bond between the company and its stakeholders, paving the way for sustainable future growth. As the world’s business landscape is ever-changing, keeping these keystone strategies in mind will be crucial for managing the inevitable pricing altercations your company will be encountering.

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